Evercore IPO jumps 18% in debut

Chairman Roger Altman's stake worth nearly $90 mln

By

SteveGelsi

NEW YORK (MarketWatch) - Evercore Partners Inc., wielding the star power of senior officers Roger Altman and Austin Beutner, sparkled in its stock market debut on Friday by rising 18% above its IPO price.

Evercore has won fans on Wall Street because of its role as an advisor on major mergers and acquisitions during a time when clients seek experts outside of the big investment banks, seen as harboring conflicting agendas.

Evercore Partners
EVR, -1.24%
closed at $24.85 for a premium of $3.85 above its $21 price on volume of nearly 2.2 million shares.

Signs of a strong debut came as it priced above its $18-$20 price range, with proceeds of $83 million by selling 3.95 million shares, fresh after vaulting into the top ten of the merger and acquisition advisory league tables this year.

Lehman Brothers Inc.
LEH
is the sole book-running manager for the offering, while Goldman, Sachs & Co. and J.P. Morgan are joint lead managers.

Evercore marks the latest in an occasional series of small investment banks to go public including Greenhill
GHL, +0.00%
Lazard
LAZ, -2.01%
Thomas Weisel Group
TWPG
and Cowen Group
COWN, -1.72%

Frederick C. Lane, chairman and chief executive of Lane Berry & Co. and former co-head of mergers and acquisitions at Donaldson Lufkin & Jenrette, said he wasn't surprised that Evercore's initial public offering priced above its range.

"When you look at Evercore's valuation relative to Greenhill -- which is a close comparable -- the valuation, even at $21 a share, is a substantial discount," Lane said.

Evercore's IPO will fare better than Cowen Group and Thomas Weisel because of its emphasis on the advisory business and not the lower-margin brokerage business, he said.

"There's tremendous demand in the corporate community for unbiased advice," Lane said. "The advisory fee global market share of independent banks could go to 25% from 10% now because of the inherent conflicts in lending and underwriting relationships (that the larger banks contain)."

Meanwhile, rival bank Keefe, Bruyette & Woods on Friday filed to raise $100 million in its initial public offering. See full story.

The New York bank now ranks No. 8 among investment banks with $136 billion in mergers upon which it advised so far this year, including the $89.4 billion acquisition of BellSouth
BLS, -7.69%
by AT&T
T, -1.25%
according to Thomson Financial.

Based on fees from mergers and acquisitions, Evercore ranks No. 14 at $99 million, according to Thomson Financial.

Evercore has also put itself on the map with a series of private equity funds.

Roger C. Altman, 60, serves as chairman of Evercore. He began his investment banking career at Lehman Brothers and became a general partner of that firm in 1974. Beginning in 1977, he served as Assistant Secretary of the U.S. Treasury for four years, before returning to Lehman.

In 1987 he joined private equity firm The Blackstone Group as vice chairman.

He returned to Washington in 1993 to serve as Deputy Secretary of the U.S. Treasury for two years. In 1996, he co-founded Evercore Partners.

Altman made about $9.7 million in 2005 compensation and co-CEO Austin M. Beutner made about $8 million, according to the company's IPO prospectus.

In addition Altman and Beutner each own about 3.5 million shares, or 13% of the company, worth nearly $90 million based on the IPO's trading price of about $25 a share

From 1994 to 1996, Beutner was CEO of the U.S. Russia Investment Fund, a private investment fund capitalized with $440 million by the U.S. Government.

In 1988, he joined The Blackstone Group, where he became general partner in 1989.

Evercore estimated its second-quarter operating income would increase to between $21 million and $25 million from $2 million in the year-ago period, according to the company's amended IPO prospectus. Revenue is estimated at $41 million to $43 million, up from $14 million in the year-ago period.

The company will go public with a total of 27.14 million shares including all vested and unvested Evercore shares.

Based on the $21 IPO price, Evercore will carry a market cap of about $570 million.

The IPO comes after the boutique advisory firm hired Gil Ha as a managing director in its corporate advisory practice. Ha, 42, joins from Rohatyn Associates, the firm run by former Lazard Freres banker Felix Rohatyn.

Besides its flurry of recent M&A activity, Evercore on May 12 also joined forces with Protego Asesores, an investment-banking boutique based in Mexico.

GNC Corp. withdraws IPO

GNC Corp. spokesman Benjamim Pratt said Friday the vitamin retailer is withdrawing its $400 million initial public offering due to market conditions.

"We're evaluating our options," he said.

GNC had planned to offer 23.5 million shares at $16-$18 a share, but deal talk about the IPO had been at $13-$14 a share, according to market sources.

IPG Photonics files $130 mln IPO

Laser technology specialist IPG Photonics on Friday filed to raise up to $130 million in an initial public offering with underwriters Merrill Lynch and Lehman Brothers.

The Oxford, Mass. company plans to trade on the Nasdaq under the symbol "IPGP".

IPG Photonics bills itself as a leading developer and manufacturer of high-performance fiber lasers and amplifiers for applications in numerous markets.

The company reported net income of $6.1 million on revenue of $65 million in the six months ended June 30, compared to net income of $2.1 million and revenue of $41.6 million in the year--ago period. Company founder and CEO Valentin P. Gapontsev, 67, owns about 63% of the company.

Intraday Data provided by SIX Financial Information and subject to terms of use. Historical and current end-of-day data provided by SIX Financial Information. All quotes are in local exchange time. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements.